Loan to invest in Term Deposit

[danaross67]

Hi

I plan to avail credit to cash ni BDO with 0.45% monthly add on rate (5.4% p.a.) and i-invest yung cash na makuha sa Netbank TD na may 7% p.a. (net of WHT is 5.6%)

Goods ba sya sa tingin nyo? Maliit lang net gain pag titingnan sa interest rates pero iniisip ko mag build-up ng low risk investment w/o touching ung savings etc.

 

[tmcp]

@danaross67

0.45% monthly add on rate

Monthly add-on rate is not the same as monthly interest rate.

If the monthly add-on rate is 0.45%, then the effective interest rate would be 9.8%.
Borrowing at 9.8% and then investing in a time deposit with a net gain of only 5.6% would then be ridiculously stupid.

 

[danaross67]

@tmcp Hi po. Nag pm me sayo for enlighten. Hoping for ur response..

 

[resjudicata]

@danaross67 "In the world of investment, you don't really have to be smart, you just need to be less stupid"

 

[greenblue]

@danaross67 You're just penny pinching. Baka yung returns na expected mo ay sa loan processing fee lang mapunta.

 

[aybige]

@danaross67 If making money was this easy then everyone should have been doing it.

 

[ricardo6081]

@danaross67 Never borrow money for investment. Invest only if you have money to spare.

 

[devilsadvocate]

@danaross67 May processing fee pa yan i think 900. Kung 100k kinuha mo lugi ka pa. Don't take a loan if you don't really need it.

 

[jamief1990]

@danaross67 Pinapahirapan mo sarili mo e wala ka nman kikitain dahil difference e 0.20% tapos after mo magbayad ng fees kakainin pa yan.

May tinatawag din na EIR interest, ito yung totoong interest (totality) so mas mataas yan in reality ... so lugi ka pa.

Tangang move to.